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Initial reports say GST rollout has been hassle-free

Dated 3rd July, 2017

The rollout of the country's most comprehensive indirect tax reform — the goods and services tax — has been positive and largely hassle-free, with no checks on state borders, smooth customs operations and no major problems reported, the government said.

Government officials are keeping a close watch on implementation and not taking any chances.

"Initial reports are positive… There have not been any hassles," revenue secretary Hasmukh Adhia told ET.

The government is now looking at a massive outreach to consumers as well as industry to clarify all issues and highlight the benefits of the tax regime, which came into effect on July 1.

"Day two of goods and services tax has passed without major problems being reported," the finance ministry said in a statement on Sunday.

"State and central government officers are providing the required information to trade and industry. We have got encouraging reports from roadside dhabas and big restaurants as well as from kirana shops to departmental stores that have started getting acclimatised to the new tax system," the finance ministry statement said. The ministry said 2.23 lakh new dealers have entered the Goods and Services Tax Network system since June 25 by filing draft applications. Of these, 63,000 have also submitted full details and among them, 32,000 dealers have been granted fresh registrations.

Adhia himself issued several crucial clarifications through the day on Sunday on certain misconceptions about various provisions of the new tax.

CLOSE MONITORING

The government plans to educate consumers about the comparative incidence on key commodities between GST and the previous tax regime, an official said, adding that it is also keeping an eye on prices.

Officials in the ministries concerned are keeping a close tab on implementation.

Cabinet secretary PK Sinha reviewed the situation on Sunday with revenue department officials. He has called a meeting with officials of other department.

ONE NATIONAL MARKET

Commercial tax check-posts at the borders in many states were dismantled, allowing for free movement of goods.

"This commercial tax checkpost has been closed," read a signboard at one such border post. "The feedback is that queues have disappeared," said a government official.

In the previous tax regime, trucks had to queue up at borders for hours to pay octroi or some similar entry tax levied by states. All such levies have been subsumed in GST.

GST combines 17 state and central taxes besides 23 cesses into one levy to create a seamless national market in the country.

The customs department, which began collecting Integrated GST along with filing of bill of entry and shipping, has seen smooth operations, two senior officials said. Software issues cropping up due to the change in entries with GST were immediately addressed as offices remained open. There was only a one-hour, late evening closure to update the software.

NO SHORTAGES

There are no reports of shortage of supplies of essential commodities and medicines from anywhere in the country, officials and experts said.

The Confederation of All India Traders, a key association of traders across the country, said business activities remained normal and smooth with footfalls of customers in commercial markets and shopping complexes remaining normal.

Tax experts agreed that the implementation of GST has been largely without hiccups.

"The rollout has been broadly smooth… No shortage of supplies," said Bipin Sapra, a partner at EY, while pitching for sectoral guidance to further help industry.

"It's good to see there have not been any major disruptions in business. The government’s massive outreach programme in the past few months seems to be paying off now," said Pratik Jain, leader, indirect tax, at PwC, also adding that the government must quickly come out with sector-specific guidance for which groups were formed.

The industry wants to see the first set of filings before giving the new tax a thumbs up.

"The acid test of the systems would be from September 10 onwards when the filing starts and the Goods and Services Tax Network will provide us our purchase registers," said CAIT national secretary-general Praveen Khandelwal.

Khandelwal also sought expeditious resolution of GST in Jammu & Kashmir, the only state that has remained outside the ambit of the new regime. He said this was hurting not only the trade but also consumers in the state.